The Federal Trade Commission (FTC) has finalized a groundbreaking "click-to-cancel" rule aimed at simplifying the cancellation process for consumers enrolled in subscription services. [1, 2, 4] This rule mandates that companies must make it as easy for consumers to cancel their subscriptions as it is to sign up, addressing the widespread issue of "negative option" programs, where consumers are automatically charged unless they actively opt out. [1, 2, 4] FTC Chair Lina M. Khan emphasized the importance of this rule, stating that it will eliminate the "tricks and traps" businesses use to keep consumers tied to unwanted services, ultimately saving Americans both time and money. [1, 2, 4] The rule, which will take effect 180 days after its publication in the Federal Register, applies to nearly all negative option programs across various media platforms. [1, 2] The updated regulation prohibits companies from misrepresenting or omitting crucial information when marketing these programs. [1, 2] It requires businesses to provide clear terms before obtaining consumers' billing information and to secure explicit consent before charging them. [1, 4] Additionally, the rule ensures that consumers can easily cancel subscriptions through the same medium they used to sign up. [4] The FTC's decision follows a comprehensive review process that included over 16,000 public comments from consumers, government agencies, and trade associations. [1, 2] This move comes in response to a significant rise in consumer complaints about deceptive subscription practices, with the FTC receiving nearly 70 complaints per day in 2024, up from 42 per day in 2021. [1, 2] While the rule aims to provide a consistent legal framework, it has faced some opposition within the Commission. [1, 4] The final rule was approved by a 3-2 vote, with dissenting opinions from Commissioners Melissa Holyoak and Andrew N. Ferguson. [1] Despite this, the FTC remains committed to protecting consumers from unfair subscription practices and ensuring transparency in the marketplace. [1, 2, 3, 4]
